GoDaddy CEO Aman Bhutani on the enduring power of the website

Today’s episode of Decoder is simply a small different: I’m talking with GoDaddy CEO Aman Bhutani, and we did this 1 live onstage last week at an event hosted by AlixPartners in Palo Alto, California, so you’ll hear the audience in the background.

GoDaddy is 1 of those companies that feels tied to an earlier era. In this case, the company had a hugely controversial reputation in the web 1.0 days, erstwhile it built a immense business selling domain names and ran a bunch of beautiful sexist ads — but all of that is long in the past. The company inactive runs a immense domain name business, but Aman has been CEO since 2019, and he’s been building out what he calls adjacencies — basically, helping the very tiny businesses that run websites on GoDaddy grow their operations. You’ll hear him talk about a barbershop owner that runs a couple sites as 1 of his biggest customers — 1 he personally handled client service for.

But the business of the web has truly changed in the past fewer years: the walled garden social network era truly took over in the past decade, and now immense changes to Google Search and the addition of generative AI have put a massive strain on the very foundations of the open web.

So I started out by asking Aman the question I’ve asked so many another guests on Decoder in the past year: What is the point of a website in 2024? Who needs one, and how do they benefit from paying GoDaddy to host it for them?

You’ll hear Aman say that a website can convey legitimacy — that his customers feel pride in having their own domains, something they own and control for themselves, to build a direct relation with their customers, alternatively of relying entirely on another platforms to do it for them.

You’ll besides hear us talk about AI a lot because, at this point, it’s everywhere. GoDaddy launched a service earlier this year called Airo, which allows site owners to make everything from logos to full site designs with just a fewer prompts.

That’s a large thought — and it’s 1 GoDaddy’s large competitors in this space are doing, too. I talked to the heads of both Squarespace and Wix last year, and they’re all chasing AI-powered web plan as well. But I wanted to know if any of this was making money for Aman — and if he thought a flood of AI content would change the web for better or worse.

And then, due to the fact that we were live, the audience got to chime in, too. They had any smart questions at the end that I think you’ll enjoy.

Okay, Aman Bhutani, CEO of GoDaddy, live onstage. Here we go.

This transcript has been lightly edited for dimension and clarity.

Aman Bhutani, you’re the CEO of GoDaddy. Welcome to Decoder.

You have been the CEO of GoDaddy since 2019. I think quite a few things have happened since 2019.

Do you think you inactive have the same occupation you signed up for in 2019?

I have not just the same job, I have way more to do than I did in 2019. I think COVID changed things and the company changed, and now we have so many more opportunities — so much more to do, even more.

One subject that we’ve been reasoning about a lot at The Verge is that the net feels like it is on the precipice of major change. AI has changed. Our distribution networks and search might be changing in immense ways. The way we bring traffic to websites might change. The creator economy might have flipped the very thought of needing websites upside down entirely. How do you see GoDaddy’s business now? Are you inactive in the business of websites, or is it something bigger than that?

At GoDaddy, we’re known to the planet as the largest domain registrar. And erstwhile I came to GoDaddy, it was inactive mostly a domain registrar and a hosting company. Of course, hosting changed in a very large way besides with the cloud and another providers. With me coming in, the thought was that it’s large to be the largest domain supplier, and it’s large to be the first company people think of erstwhile they have an idea. due to the fact that erstwhile you have an idea, what do you want to do? You want to lock that name down. But there’s so much more we can do with that. So we should go into adjacencies. We should find the things that our brand has a right to sale to our customers.

Our client is the micro business. This is the very, very tiny business. If you get to companies with 10 employees, you’ve already traversed more than 90 percent of GoDaddy’s 21 million paying customers. So it’s mostly very, very tiny businesses. And what are the needs that these folks have, and do they want those from us? What we found is that our customers had identity needs — not identity as in their individual identity, but in how they show up to the world. They had needs around their presence, whether it was in store or online, and that’s where websites come in. And they had more and more commerce needs.

So today, GoDaddy has grown a section we call Applications and Commerce that is entirely around these fresh businesses that we’ve built. That’s taken us from, let’s say, chapter 1 of the company to writing chapter 2 of the company. And yes, the internet’s going to change, and I think AI will change quite a few things, but websites are as crucial to our customers present as they were 20 years ago.

All right, hold on to that. 1 of the things I think about a lot is why you would start a website. I’m in media, so if I were to start The Verge today, I don’t know that my first decision would be to start a website with a CMS and a staff of people who write. I might just start a YouTube channel or a TikTok channel.

One of my favourite kinds of TikTok is tiny business TikTok. I’m deep into the pressure-washing community. Pressure-washing TikTok is 1 of the most calming things you can encounter. I’ve gotten my home force washed a number of times, needlessly now, due to the fact that it’s so good, and I own a force washer. That’s a kind of direct marketing that’s very cheap, it’s very effective, it’s very human. And it seems like that community isn’t racing to go set up hosting and have a website.

What’s the thing that tips people over from, “oh, I should actually go distant from these platforms the audience is built in” to “I request to run something of my own”?

I think the platforms are fantastic in a way. Thanks to these platforms, these micro businesses — your force washing community — can not only meet and talk on their Usenet group, they can share videos, they can transact, they can scope people who have interest. They reached you, which would’ve been impossible in the past, so I think it’s truly good.

I don’t see that removing the request for them to have their own website or their own space where they represent themselves in the best way they can. While they may not be racing, as you say, I think what we do find — and I talk to our customers on a very regular basis — is that there are many reasons they build their website. They might build their website due to the fact that they want to have a place where, erstwhile they scope individual on a platform, they want to be able to direct them to something that they own and create, and where they have a full representation of themselves. It may be to accept a bill. It might be a payment, or it just might be everything in my art gallery. 1 of the customers I talked to has an art gallery and she does it for a very circumstantial group of people. She put it online and it brought her a ton of traffic. It brought people to her studio that she’d never seen before.

I could tell you so many of those stories, and what you’ll find is that those websites give these micro businesses legitimacy. In fact, there’s a stat from one of our fresh surveys where even in the millennial or Gen Z generations, 4 out of 5 people are saying, “before I buy something from a tiny business, I go check their website first. I just want to know that they’re legit. I check the reviews due to the fact that I want to know that they’re legit.” Those things truly let a individual who is simply a sole opener and just started their business to scope people in a manner that is not just good and affirmative but where they have a chance to compete with the large player.

But it goes further. I don’t know if people in this group have run a micro business, or individual in their household just sells jewelry online. GoDaddy’s average client sells like $100,000 a year on 1 of our systems. That’s truly not much, right? That’s very small. But erstwhile you talk to them, it’s not just that the website gives their business legitimacy. It makes them feel more confident. That actually is the number 1 thing. If you are a sole opener, the number 1 thing that’s going to take you from there, to hiring your first employee, to being successful is that you have the assurance to get through the tough times. For many people, looking at that website and building that website makes them feel more assured about what they’re doing. And that’s something.

I was looking at your last earnings, and it seems like the full number of domains you’re servicing is reasonably flat, but then the gross inside of those customers is growing. So you’re providing more services to a neutral amount of people.

The approach we took over the last year is to go into quite a few businesses and grow the client account significantly. But GoDaddy has besides done any acquisitions that had a client attached to it in different parts of the world. 5 years ago erstwhile I joined, my imagination was to grow into adjacency. So the gross is going up due to the fact that we’re large in productivity solutions, in websites, and we have commerce offerings. Those are the businesses that have grown very fast. What we call the core business, which is the older business, grew by low single digits, while the fresh businesses grew 20 percent. That’s where you are seeing the growth.

While we see that growth, we besides have a strategical imperative to divest and end-of-life any older platforms. That’s been a headwind for us, not just on client number but on gross as well. We actually shared with The Street that over the last couple of years, we had 1 to 2 points of headwind on gross just with the divestitures and what we chose to shut down. But I fundamentally believe that us focusing the company… and we are not a very large company. We have over $4 billion in revenue, and we’re about 6,000 people. We request to make certain our people are working on the most crucial things. If that means that we request to divest certain pieces or just end-of-life and scope out to a set of customers and say, “Look, we just don’t do this anymore,” then that’s what we request to do. And you see that force in our numbers.

The thought that you’re going to supply more services to a set of customers —

Well, we’ll add more customers erstwhile we get past this headwind, but —

The reason I bring it up that way is I’ve talked to a number of companies who are nominally your competitors. Squarespace has been on Decoder, Wix has been on Decoder, and companies that even aren’t nominally your competitors like Intuit. All of them are kind of in the same space, which is, “Okay, you have a site. Now we’re going to usage your site to take over your back office.” I think the canonical example is you have a yoga studio or you’re a individual trainer, and you request to do scheduling. So the front end of your website needs a scheduling functionality, which means now you request a back-end scheduling functionality. That means you request a billing system, and most likely an account management strategy or a sales management system. We’re just going to build all that for you. So you’ve gone from setting up a Squarespace website to having the full back office run by Squarespace.

It feels like you’re headed in that direction. You have a number of these services you could offer. Where does that halt for you, or do you see more growth there?

I think we’re squarely focused on what our customers continually tell us is their number 1 precedence and what they want from us: how do they work better with their customers? So our tools actually don’t go into the back office at all. That may be the strategy for any another companies. If you look back at GoDaddy 5 years ago, it had this mode called, “Dream It, make It, Grow It, Manage It.” 1 of the first things I did was say, “No, we’re just going to do Dream, make and Grow. We’re not going to do Manage.”

The company had actually bought another company or two, and there was a set of products that we end-of-lifed, and got out of those businesses. due to the fact that what our customers want from us, where we have the right to win, is in the early phase. For this customer, it’s how they engage with their customers. It’s not in the back office. And yes, over time that may be a partnership chance for us because, like you’re saying, we have a certain relation and we can grow it. We can look at that. But strategically, we’re very much focused on what we believe is their number 1 opportunity: how they better service their customers and what they want from us, which is the tools that let them to do that.

There are 2 themes I want to choice up on there. 1 is around AI and 1 is about growth generally. But you’ve brought up the size of the company and any decisions you’ve made, so I want to start with the Decoder questions, which are a gimme. This is just LinkedIn thinkfluencer bait. So get ready. You said 6,000 people, $4 billion in revenue. How are you structured?

At GoDaddy, we have a image that looks like a house, and it’s part of what we call our operating model. Just like a kid would draw a house, you have the roof and it has 2 slanting ends, and that represents our brand. That’s a strategical change from 5 years ago where I said, “Look, all things are going to come in to the GoDaddy brand, which serves this customer. We can grow the brand to service more customers, but we’re not going to go out and be a home of brands.” The company had done an acquisition to kind of prosecute that, but I said, “None of that. We’re going to be very focused.” So that’s the roof.

Under the roof, imagine a fewer rectangles that we call rooms. Each of those rooms is what we call “customer-backed.” Each area serves a certain client population, and those are our business units. So at GoDaddy, you don’t have a business unit that delivers a product. You have a business unit that serves a peculiar client base. For example, you have an independent customer. This is simply a client who wants to do things themselves. There’s a business unit that’s full occupation is to do the product, go to market, P&L management, and technology for that customer. So you have 5 rooms under that roof.

Below that, we have a set of horizontals, which are the platforms across the company. The first 1 is our care platform. This is what most companies call the call center. We call it care. We don’t believe we’re a call center, and we don’t believe we have call center agents. We have guides; We have care and guides. Their number 1 metric to hit is NPS, not a cost function.

Under care, we have marketing. This is not the marketing decisions for the client population, it’s the mechanics of marketing. You don’t want 5 rooms fighting for their own Twitter accounts or SEM accounts. You want that executed in 1 place, so that part is centralized. You have the CTO group, which is e-commerce, data science, the data platform, the pieces that are shared across the company. And then the corporate platform, which is legal, HR, and finance.

That image is something I drew most likely 5 years ago erstwhile I joined. all leader in the company knows that picture, and the board sees that picture. It’s called a house, and that is foundational to our operating model. It defines the structure, and it defines how different teams engage with each other. If you’re a area or a vertical, you have a P&L and you behave a certain way. If you’re a horizontal, you have a way that you engage with the 5 verticals to simplify and be able to decision fast while you centralize certain things.

My gag on Decoder is, “If you tell me your org chart, I can name 85 percent of your problems.”

That’s most likely true. It’s besides actual for code. erstwhile I utilized to take over teams — it’s 1 of the things my bosses love to do due to the fact that that’s how my career grew — I would take over teams and they’d always ask me, “What do you want to do erstwhile you’re taking over this tech team?” I said, “Send me 2 things. Send me the last yearly HR report: all person, what rise we gave them, all the money for everyone. what do they get. And send me a link to the codebase.” due to the fact that if your code is structured a certain way, I can tell you which 2 leaders don’t work well with each other, everything about it. It’s Conway’s law, which says that the structure and organization is the function of the relation of the organization that designed it. So it’s absolutely true.

And not just your org illustration but your operating mode. You want the org chart. You want accountability structure, you want culture, you want your opmax. You want a fewer things. If the operating model doesn’t tell you 80 percent-plus, you fundamentally don’t have an operating model. People are just making crap up then. They just work nevertheless they work.

All right. So alternatively of me guessing your trade-offs, you tell me. What trade-offs do you think you bought with the room’s structure?

The biggest thing about our structure is that by building a customer-backed model that goes into the same brand, we have dedicated people that focus on solving a certain customer’s problem. As the company grows and addresses the needs of different types of customers, the same group can’t truly divert their attention to different customers at the same leadership table. The people in the company — and due to the fact that we’re the world’s largest domain player this is simply a bit of a niche thing — service the largest group of domain investors in the world. The people who service independents should not be reasoning about domain investors. That should not happen. That’s what the operating model does. It puts the client population first, and then the business unit. Then the business unit worries about the go-to-market, the product, the P&L and so on. That’s the affirmative part.

The trade-off is that anytime you have a many-to-one relationship, you’re going to have any friction. You’re going to have any prioritization conflict. You’re going to have people saying, “I’m not getting my part adequate due to the fact that I gotta depend on individual to get it.” The horizontals that we have works in an accelerator brake model, especially as you get lower down into the tech platform or the marketing. The business unit wants to spend as much as possible as rapidly as possible for their customer, but now they gotta talk to a CMO who says, “Hey, wait a minute, this another business unit will get a much better return on this investment. So why are you getting this? individual else should get it.” The same marketing squad that was the brake on the business unit is now an accelerator due to the fact that marketers want to spend as much as possible. Then you’ve got the tech organization under it that says, “Hey, here’s the media mix model. It runs on device learning. Here’s what it’s saying, and here are the returns. You want to spend in this channel, but actually the data says you should spend on this another one.”

So you have this accelerator brake model throughout the structure. That causes what quite a few people call pain in the organization; I call it pressure. I say, “Look, if it’s pain, bring it to me and I will aid you resolve it. If it’s pressure, just realize that it’s designed to do that. If you feel force talking to the another tier, it was built that way due to the fact that you want the accelerator brake model.” Cars run better with an accelerator and a brake.

We were joking before that I’m a journalist. I just spend money. I don’t make a dime. It’s 1 of the large perks of being on the editorial side of the house. But what you find frequently is those models don’t have hazard priced into them. If I take a riskier bet, I might get an outsized return, but it’s hard to quantify the hazard inside of that dynamic.. It’s hard to say, “Okay, there’s actual real growth here, but we gotta halt doing this.” We can usage AI as an example. We’re going to forward invest a bunch into AI due to the fact that we think that’s truly useful and everyone’s talking about it. But actually, if you look at the full of the AI manufacture right now, no 1 knows how this is going to make money at the scale that the investment is presently driving. How do you think about putting hazard in them all?

The way I think about this exact comment about hazard is that it’s a function of who is in the area erstwhile the decision is made. This is 1 of the reasons I don’t usage the operating model that’s full functional. I think if you have a leader — and it works large for many companies, it just happens that what works for us well — but in the functional structure, you end up at the CEO table with people who are leading quite a few corporate functions.

So let’s say that you have individual that’s chief gross officer or individual that’s CTO, chief legal officer, chief people officer, or chief hazard officer. I think the numbers matter. If there are 4 corporate leaders in a area and 2 people who are accountable for the performance region for the business and making money, you’re going to end up with a lower hazard decision-making set up. Those corporate leaders are designed to be in the productivity zone, and the productivity zone’s occupation is to reduce risk.

At GoDaddy, we have the GoDaddy leadership team. It is specifically weighed where the leaders of the rooms and the verticals — the business unit leaders — are part of the group. So in any area where we’re making an assessment at my level on whether we should take a hazard or not, there are more risk-takers than not. Your CFO’s always going to tell you to be more conservative. That’s his occupation or her job. Your CLO’s always going to do that. That is their job. What I want to do is make an environment where I have the head of the independents business there, the head of the partners business there, the head of the commerce business there. I’m there and the COO’s there. Now abruptly there are five, six, or 7 of us who want to thin in into the risks, who want to research it.

Of course, we can usage our judgment, take a step back, and say, “Maybe this is simply a hazard we don’t want to take.” But we’re not going to get stuck in a area where we’re the number due to the fact that then the majority will win. And you don’t want that. Business is about taking risks. It’s about taking hazard in a manner that’s reasonable, that’s thought out, that’s backed by data, and that’s well understood. Or at least, you’re working hard to realize it as well as you can. So you just don’t want to make the setup where that conversation doesn’t happen.

So this is the another large Decoder question: How do you make decisions? What’s your framework?

At the company, we’ve had 2 large transformations over the last 5 years. The first was about evolving our software platform. That’s truly about GoDaddy being a domain and hosting company, and your margins erstwhile you’re a domain player are your gross margins. But erstwhile you’re a software player, you have much higher gross margins. So, let’s build software, which was a transition for the company.

Your question is truly about our second transformation, where we make decisions based on evidence. I’m a large believer in belief. I want to believe in things that are not there yet, but I’m besides equally large on the technological method. So the approach for us is, “If you have an idea, I don’t want to spend quite a few time talking about it. If it can be tested, just test it. erstwhile you’ve tested it, you can just put it in GD experiments Slack channel and anyone in the company can see it.”

You have the same thing that’s now taught to first graders or kindergartners. You have an reflection of the world, you have a hypothesis you want to test, you have a test you’ve designed, and you’ve got the result. erstwhile you run it, you put it in Slack. If the data makes the decision, we’ll go against it possibly 0.1 percent of the time,. But usually the data is leading us, and the decision is delegated due to the fact that the metrics are clear and the prioritization is clear. How you track that metric is clear. In that 0.1 percent of times, let’s say it’s a one-way door or you request a HIPPO decision (HIPPO being “highest paid person’s opinion” wins). It’s kind of the antithesis in my head of data-driven decisions. But if it should be a HIPPO decision, well let’s reduce that number to as tiny as possible, and then figure out whoever’s the best individual to make it. If I’m the best individual to make it, let it come to me. If the chief architect should make it, then he should make it. But you effort to reduce those decisions to the fewest possible. Hopefully that helps.

The 2 Decoder questions aid me figure out how to ask all the remainder of the questions. So now I want to ask about AI. If you all haven’t seen the GoDaddy AI platform, it’s called Airo. I believe it can even fill out your LLC paperwork for you. You can tell it, “I want to buy a domain name,” all the way to, “I’m interfacing with the government to tell them I have a business.” It’s a lot.

We’re doing rather a fewer tests in that area.

You set up the website for you, you can fill out the copy for you. This is simply a large investment.

Today as we speak, we’re competing with Satya Nadella, who’s onstage at Microsoft Ignite talking about scaling laws. But all the large companies are telling me this is simply a platform shift. I don’t truly rather know what it means, but I have any ideas. Do you see the scale of that investment, the decision to go after utilizing generative AI to make things for your customers, at the same scale or return on investment as the large players you’re seeing?

The part we’re truly focused on in our business is that last mile: how generative AI adds value for our customer. 1 of the things we always say at the company is, “Yes, we are going to take any of the friction out for the client to build something, but we’re always going to make certain that the client is in control of their brand.” It’s yet their decision. It shouldn’t just auto-magically happen. It should happen magically, and then they should decide whether they like it or want to edit it. What we find is that our customers don’t have copywriters. They don’t have those people. They don’t have lawyers to advise them. They don’t have marketing people to advise them. They don’t have a webmaster. So if generative AI can start them off on an About Us page that makes sense or give them an image for a logo, they’re like, “Oh, this is beautiful good and I’ll customize it from here.”

That’s a fantastic start due to the fact that quite a few people are not going to start their side hustle or their micro business even if they have a template and everything. erstwhile they actually gotta choose the images or kind in the text, they may not be as proficient in English, or they’re just not able to bring it together. They’re a truly good plumber, just not as good at writing about how good of a plumber they are. Well, if generative AI can do that, I think it’s a fantastic thing. We don’t look weirdly at people who usage calculators to do math, do we? And I think generative AI does that work for text for our customer.

I want to be 100 percent clear: my dad looks super weirdly at me erstwhile I usage the calculator.

But the question is, will you at your children?

I guess that’s the general AI case. I’ve heard that from everybody. I’m saying that, specifically for GoDaddy, you had to invest in the Airo platform.

And erstwhile I talk to the large companies, with their large investments in foundation models, and H100s. It’s hazy how you get from that to what they think will happen. Is it hazy for you? We’re going to invest in Airo and that’s going to drive growth?

No. The investment level in Airo is much smaller than building a $500 million model. It’s nowhere close that. due to the fact that Airo is very, very close to the customer, we can run 100 tests within 1 year to see whether it’s actually creating value or not. Does it actually decision client willingness to pay or not? due to the fact that if you gave the client something and they’re not willing to pay more for it, you didn’t truly meet a actual request for the customer. Yeah, you gave something away, and possibly any people usage it, but the real breakthroughs are erstwhile you make something, get the client to usage it, and they’re actually willing to pay more for it. And we have that data, right? We are able to see that data in a year.

In terms of the very large investments in AI, typically what I say to people is, “I remember erstwhile the net came along, and there were any very large companies putting cables all over the world.” We’re inactive utilizing those cables even though those companies went away. We’re utilizing that cable today, and they put in so much cable. They didn’t imagine there was going to be video on the net back — or possibly they did imagine and invested truly early. I think that’s the cycle of technology. In many cases, from electricity to mobile phones to satellites to now AI and the internet, large investments should be made to make it available to everyone, and sometimes the usage comes over time.

Whose models are you utilizing for your AI products?

The way we usage it on our platform is that we have a single API. Whether I want to compose a review for my direct [reports] or GoDaddy’s strategy is writing something for its customer, everything goes through 1 common set of APIs. It’s easier to do moderation, and behind that API, we have all the models connected. So we have connections to OpenAI, to Gemini and the Microsoft Azure version of OpenAI, and that allows us to do any investigating at the API tier to see where we’re getting a better response, and, frankly, frequently a cheaper consequence that’s just as good. due to the fact that we can pass signals to the API tier and the API tier can decide, “Okay, I’m going to usage this model alternatively of this one. Was the consequence just as good or not?”

Do those feel commodified to you? I’ve heard quite a few people say that the core model functionality is going to get commodified and prices will come down.

They know something I don’t know due to the fact that I think it’s besides early to say. I think it’s changing so fast. The fresh models, even in the [OpenAI] GPT-4o model, are just different. It’s different from what we expected, and I think the more you have intelligence and understanding, this is going to change a lot over the next year or two. It’s besides early to word it as a commodification.

You’re 1 of the fewer CEOs I talked to who’s willing to put real price tags next to AI work. Do you see consumer price sensitivity, like, “I’ll get you a better answer and that’ll cost you more money,” or is it just AI?

There is consumer sensitivity, especially for our consumer. I’ll tell you a fast story. The first client I truly talked to in depth was an HR individual at a roofing company. Her husband had 2 barbershops and she was a webmaster. She was upset due to the fact that her $200-a-year subscription was going to increase due to the fact that the Dreamweaver instance we supported for her — that was at end-of-life, 15 years, erstwhile I talked to her — was not working anymore. The reason she emailed me and called me was due to the fact that that small delta in the year was a large deal for her. another people may say, “What’s $50 a year?” But for this customer, it was truly quite a few money. So I would say the micro business client is very, very sensitive.

We have a test right now where Airo scans your website and tells you what you should change on that website. It’ll do it for you too, but you can do it manually yourself — this is on managed WordPress. It besides tells you how to improve your SEO or improve your labeling, navigation, content, or make your pictures lighter so it loads faster. It will go through your site and give you the top advice and order them. We have a price tag on that right now that’s being A/B tested, and so far, the signal is encouraging. That’s just 1 of many paywalls we’re investigating right now where it’s real AI functionality that has a real price tag.

And look, not everyone’s going to pay for it, so we’re going to gotta find any balance between giving adequate for free that everyone values it and holding something truly crucial back that the percent willing to pay for it pays for it. Then, we can value-based price that and make it work for everyone.

I warned you that this would be a therapy session for me about the web before we started. You brought up Google. This is where I think I have existential fears about the net that we live in. What I specifically mean is the thought that you can do automated SEO, which implies, one, that there’s a right answer to SEO problems–

It’s not automated. It’s a suggestion.

Sure. It implies that Google is static, which it is not, and that Google Search will proceed to be a reliable origin of traffic over the long term. Will Google be a going concern in the Trump 2 administration? It’s a small bit up in the air. I think it was yesterday that the Department of Justice was like, “We’re going to make you sale Chrome.”

[Laughs] I most likely couldn’t afford it.

The guy from Rumble is like, “I’ll buy Chrome.” It’s an open market.

Let me bring you to that example since you talked about the tool we just launched. You may not be a technologist. By the way, lawyers are like coders. Contracts are kind of–

Yeah, you are. So there’s a logic mindset to it, and you’re absolutely right that those things in Google and search are changing. But you are a very sophisticated individual erstwhile it comes to knowing that those things are changing. I’m talking about a client who builds a website, sells force washers, but does not put the word “pressure wash” in the title or the H1 tag. Those are truly crucial if you want to rank. That’s no secret. That’s not exposing any secret Google algorithm.

But let me just ask you this. This is the fight. There’s any SEO that people understand–

For these micro businesses, these folks don’t know the basics.

But it’s the thought that the net will be full of AI-generated content that will go into LLM training data, and that our search behaviors will change due to the fact that OpenAI, SearchGPT, or Gemini will just tell us the answer. There’s incredible force on the very notion that those platforms will proceed to send traffic to websites, as opposed to, “All of our app and marketing is on video platforms, and the last step is you come to my website to convert.”

So I worked in another business where the large platform companies, including Google, are very large. The hypothesis has existed for over a decade that the large platform companies will proceed to take more and more of the traffic — which they have, it’s true, or the data suggests so. That will lead to less websites, less domain players, and so on, and it will be a failure for the open and free internet. That will be a large failure due to the fact that the net was built around this thought that anywhere in the planet — of course, if you’re not on [behind China’s] large Firewall or something — you can scope any part of information in the planet in a very flat manner. You just gotta kind a URL and HTTP takes care of it. It’s amazing. It’s unbelievable what happens on the internet, right?

My fundamental belief, and possibly I want to believe it alternatively than prove it, but my fundamental belief is that AI can make data and platforms can keep trying to take more and more of the data. They’re definitely creating supply and demand. It’s not like they’re just eating everything; they’re creating the supply too. They’re creating content that leads to people utilizing quite a few data or bandwidth.

But my fundamental belief is that the more AI grows in that, the more crucial your words are going to be on The Verge due to the fact that you are active with it and no AI is doing what you’re doing. The same thing is actual for our customer. Let’s look at micro businesses. If a mom decides to sale jewelry online, believe me, I can’t do anything besides breathtaking with it. I can possibly give the mom a fewer ideas on how to structure it, but that is simply a real business. It may put food on the table or it might just give her joy and satisfaction in life, but that’s a real thing. I think it’s very hard to replace that, and I think it’s only going to make it more popular.

We have a PR line at GoDaddy. I’m going to mess this up due to the fact that I didn’t read it carefully enough, but it’s something like, “Welcome to the smallest Black Friday ever.” due to the fact that this Black Friday, our services show that more customers in the U.S. want to buy from tiny businesses. And get this, they’re willing to pay more to buy from a tiny business than buy it from a large business. You don’t hear that very often, but this year on Black Friday, that’s what consumers are saying. I think the more you see this data and you see this AI, the human component is going to be more important. I want to believe that and I do believe that.

When you look across all of your customers, is Google still, by far, the largest referrer of traffic?

Google, between Google Search and YouTube, is simply a very large referrer of traffic. I think social is continuing to grow for sure, but I think Google inactive has the dominant position.

Bluesky is growing. I think right before we started talking, it hit 20 million users. It’s not a lot compared to Threads at 275 million and Twitter at 300 million, and then Facebook and TikTok. 1 of their differentiators is they don’t suppress content with links in it. They’re very arrogant of this. Jay Graber was on Decoder, and she said, “We are part of the web. We want this platform to feel like the web.” another platforms like Threads, TikTok, or Instagram don’t let links out, right? They’re closed ecosystems.

How do you think about moving a company where we want people to grow by making websites, whether they’re micro-entrepreneurs or larger, but they’re up against marketing channels that want to keep them inside of their ecosystems?

Look, it’s a fact of life. You described it right; it’s precisely how it is. What we tell customers all the time is that, “Yes, you should usage the platforms to scope fresh people, but ultimately, you should bring them to your website, your experience, or your store due to the fact that that allows you to do that. The net offers this amazing capability where now, if I start a brand, let’s say it’s the same example: homemade jewelry. If there are 100,000 people in the planet out of 7-plus billion who are curious in my jewelry, they can all scope me through my website and transact with me, and technology allows us to do all of that. 1 individual can run that full thing.I think that’s just continuing to happen.

Yes, many of the platforms don’t let links out, but there’s a request for the consumer. If I see an article from you on a platform, yes it’s interesting, but if it engages me, then I want to see the full image of what you’ve got to offer, and I’m going to get that on your website. I will come whether they link it or not. They can choose not to link it. I’ll find it if I’m truly interested.

I’ve got a fewer more and then we’re going to take any questions in the area here. Your investment in AI, is that paying off? Is that a affirmative ROI yet?

No, we’re inactive in the investment cycle on Airo. We have truly good early data for Airo, so we are going to proceed to invest. In fact, I’ve publically said in earnings calls that while we are investigating crucial monetization opportunities. But my primary metrics are discovery and engagement. I want people to discover Airo all over the world. I want them to have engagement with the different pieces of Airo — Airo has quite a few different components in it. Those are the 2 primary metrics that I’m focused on. Yes, we will monetize as needed. We did a three-year financial plan, we did an investor day in February 2024, so it hasn’t been a year yet. And in that financial plan, you’ll hear me say, “There is no Airo in this.” There’s $0 for Airo in the three-year financial plan. There will be any return, but I didn’t want to even have our CFO guide to it.

When do you think that will change? Is it after 3 years?

I think if we’re making good progress, it’ll happen earlier. But things were changing so fast erstwhile we did that presentation. Just between February and November, so much has changed in Airo: the take rate, the uptake, the engagement. Believe it or not, we’ve had 3 million people discover Airo, and we’ve had over half of them engage with any part of Airo. As that engagement deepens, we know that leads to monetization, so I think it’ll happen a bit sooner than we expected. But we’re going to keep driving that discovery and engagement number.

Is that based on a fixed-cost estimation for how much the models will cost, or are you expecting any variability?

It makes any assumptions on what the models will cost, but unlike any another people, that’s a bit of a smaller expense for us if you compare to others. The reason is that we have a number of device learning models. They’re not generative AI models, but a number of device learning models internally do quite a few the dense lifting on what Airo does. We have actually tried very hard to minimize how much we would gotta pay individual else.

I always remind the squad that erstwhile I came to GoDaddy, our ARPU was $167, and we crossed $210 last quarter. With that $210, we’ve got to pay [cost of goods sold], pay our salaries, marketplace this product, and invest. And then we inactive gotta have a margin that starts with a 3 handle. With gross margin in the mid-sixties and a three-handle operating margin, you don’t have a lot. You’ve got to make all bit work.

You run any managed WordPress hosting I believe?

Do you know what’s going on with WordPress right now?

I am acquainted with this. Yes, I follow it closely, actually.

How do you think that’s going to resolve? This is simply a large lawsuit.

I don’t know how the lawsuit’s going to resolve, but I do realize why it happens. I think you’ve got 2 large players in the WordPress space taking different positions, and it’s got to play out over time.

Which position are you going to take? Do you contribute back to open source?

We do. Depending on how you number it, we’re either the second-largest or the third-largest contributor. You can go to 5 for the Future; it’s published data. You can look at it.

So Matt [Mullenweg, WordPress CEO]’s not going to yell at you?

Could change. If he’s listening.

He listens. All right. I think we can take any questions from the area if you have any?

Speaker 1: Over the years, GoDaddy has been innovating, truly pushing the boundaries of what you offer, and reinventing your offerings over time. Do you have a sense that the pace of disruption and the required innovation you request to bring to marketplace to stay competitive is becoming faster and faster to the point that it gets hard for a single company to stay current and at the edge?

If the question is if the rate of innovation will proceed to accelerate, I think it is. There’s this thought of “gradually then suddenly,” and tech follows that cycle again and again. The “suddenly” parts are getting steeper and steeper. OpenAI had more users faster than the company before it.

I don’t know about any 1 company. I think technology is moving so fast that it has a disruption cycle built into it. At GoDaddy, we’ve worked very hard to make certain that we can enter fresh businesses and proceed to grow the company. That’s worked truly well for us over the last fewer years. I frequently say to the squad that, “You might have time, but I have no time at all. I’ve got to make everything happen now. But at the same time, for the right idea, I’ve got all the time in the world.” Sometimes people say, “Why do you say you have no time and then say you have all the time in the world?” So it depends on the context, doesn’t it?

Speaker 2: Now that you’re moving into all of this adjacent white space, how do you compete against the likes of Shopify? due to the fact that they’re coming at it from a different angle. What is it that makes you unique and different right now, and what’s the plan ahead?

Entering an adjacency, especially a large 1 that’s increasing fast, is always going to be hard due to the fact that it’s crowded. It’s not rather white space. There’s quite a few players in it already. Our positioning is very clear on the commerce piece. We actively marketplace our commerce offering only to our existing client base. So that gives us a CAC advantage. It is virtually built, designed, and invested in with that view. We don’t go out and effort to tell the planet that we have this offering due to the fact that that would be prohibitive in terms of marketing.

What that allows us to do is to build a competitive commerce offering, which of course is simply a multi-year journey. It allows us to build it while maintaining a certain burn rate on it so we can get to scale. That’s 1 of our competitive advantages. We have almost 21 million paying customers today. In that base are quite a few customers that want commerce. In that base are quite a few customers that happily take GoDaddy. We have good conversion rates on it.

But you’re right. You’ve got to find your angle, right? Otherwise it’s just besides hard.

Speaker 3: erstwhile you started your conversation around generative AI, you said you mostly utilized generative AI to build something for your customers, and then that kind of conversation shifted to margins and the financial plan. So have you evaluated areas within the organization where your cost to service each client can come down utilizing generative AI? Has that been a thought process?

We have something we call the GoDaddy innovation model, which is like a staircase. The thought is that everything we do starts with magic. any human knows how to do it, but no of us realize how it happens, so that’s magic. erstwhile it scales, you gotta structure it, which means it’s going to be process-powered alternatively than human-powered. If you can do better with that, you’re going to be automated, which means it’s machine-powered. Then the highest step in the staircase for us is that it’s data-powered, and we call it magical again, but it’s just AI.

So a number of processes at the company, even our corporate functions, have targets to drive processes up the staircase and get to that level. The simple thought is that as you go up the staircase, you gather more differentiation, more scale and more personalized experiences, even for a process internally. So yeah, it’s a large thing. Whether it’s in our care guides — we have better and better tools to turn our care guides into super guides — all the way to how we do our marketing, how we do our spend, or how we price, more and more of them are driven by data.

Speaker 4: How do you think about client success and client attention given the section of the marketplace you’re focused on? I’d love to hear your position on that.

I think people view this as a truly tough client retention or client success vertical. We have an 85 percent published retention rate. We truly think about client churn, not product churn. In our client base, you actually see people who tried a business, they got a domain name, but it didn’t work out after 9 months or 12 months, and they request a fresh idea. But they inactive gotta put food on the table or they have the drive to do something. They’re going to do something else. Are they doing it with GoDaddy? We want to keep that engagement with them.

I think quite a few businesses are not structured to supply a advanced level of care. It’s kind of treated as a cost center. In our case, the care organization is simply a actual competitive differentiator. We call what they do “guidance.” Yes, our care guides have any targets, but they don’t have a script. They don’t get told, “Ask the client X, Y, or Z.” The goal is to first realize what the client wants and solve their problem. Then, we have sales motions due to the fact that we can end up spending quite a few time serving a person.

We have a transactional NPS (net promoted score) in care and it was very, very high. erstwhile I came from the travel manufacture to GoDaddy, I was shocked. That transactional NPS was phenomenal for what I, at that point, called the call center. Today, we’ve publically said that our transactional NPS in care is 65-plus. So we are 1 of those uncommon companies where if you have a problem, we’re going to work very hard to fix it, and we’re going to fix it a very advanced percent of the time. And erstwhile we fix it, quite a few customers become customers for life. Then, you get the lower churn rate out of that.

What’d you do for the Dreamweaver barbershop lady?

I talked to her 3 times on the phone. She said, “This is truly good to talk to the CEO of a public company.” I said, “You’re 1 of my biggest customers. The ARPU is $167, I’m asking you to pay $275.” I said, “You’re a large customer. You get to talk to the CEO.” She loved it. She talked to any of the tech folks.

I asked her how she updates her website. I don’t know if you know how old Dreamweaver is. It’s been end-of-life for a very long time. any designer-developer built it for her. She would copy the fresh image to a certain folder, rename it to the name that was in the code, refresh the site and the fresh image would get picked up. That’s how she updated images. She didn’t know how to change the code. Iit took a couple of weeks, but we convinced her that she’d be much better off on a fresh platform. And she yet said, “Okay, I’m going to pay the $275.”

Oh, you didn’t give her a discount?

The squad might have. I didn’t. I don’t think I gave her a discount.

That’s great. What platform did you put her on?

I think she actually went to 1 of the newer hosting platforms.

Hey, you know, sometimes there’s a discount and sometimes there’s no discount.

[Laughs] That’s how you get gross and growth, everybody. No discounts. Aman, thank you so much. This was amazing.